Overhead – The 5,000 lb. Elephant In The Room

 

Did you know that the average overhead for a non-profit is 36.9%?

Overhead is popular topic surrounding non-profit efficiency. While there are arguments on both sides of the topic, we will save that debate for another time.

There are a few non-profits that operate in similar circles as One Donation. Without mentioning names, one non-profit we have all heard of relies heavily on payroll donations. This organization boasts a 19% overhead rate; which is really good when compared to the industry average of 36.9%.

But what about One Donation?

At One Donation, because of the structure of our foundation, we are held to an even higher standard than the average non-profit. Of all the funds that pass through the One Donation foundation, we guarantee to send 85% onto their intended non-profit. That means we must maintain less than 15% overhead. While 15% overhead is the acceptable target, we are striving to be in the single digits.

Let’s look at two examples:

Example 1: If someone sets up a recurring payroll donation for $5, One Donation charges our flat fee of $0.50 per transaction. That means we have only 10% going to overhead and 90% going directly to the cause the donor/employee supports.

Example 2: If someone sets up a recurring payroll donation for $10, One Donation charges our flat fee of $0.50 per transaction. That means we have only 5% going to overhead and 95% going directly to the cause the donor/employee supports.

We are able to limit our overhead by utilizing technology. With the use of the proper technology, One Donation does not need a large number of employees or offices located in every major city across the country. We are able to stay lean and ensure that we pass as much from every single donation as possible onto the causes that our donors support.